How to Apply For Federal Aviation Administration (FAA) Temporary Premium War Risk Hull and Liability Insurance
Information for the Insurance Applicant
The FAA, under Section 44302a of Chapter 443 of Title 49 of the United States Code, is authorized to issue premium insurance to an air carrier if the air carrier’s insurance carrier unilaterally terminates the air carrier’s war risk liability coverage pursuant to— (A) notice under the policy; (B) an endorsement to the policy; or (C) an automatic termination provision in the policy. The FAA may provide war risk reinsurance or insurance for one coverage period not to exceed 90 days, and the policy may provide coverage to the extent allowed under 49 U.S.C. 44303. The FAA will calculate and bill the premium based on a prorated amount equivalent to the premium that was in effect under the terminated insurance carrier policy.
The FAA has developed a premium war risk insurance policy for hull and liability insurance. In order to conduct insurance business with FAA, an air carrier must agree to use the online Aviation Insurance Data Management System (AIDMS). The air carrier must sign and return a Memorandum of Agreement (MOA) “TO CONDUCT COMMUNICATIONS REGARDING AVIATION INSURANCE BY ELECTRONIC MEANS,” under which the FAA and air carrier agree to use AIDMS and electronic means to conduct insurance transactions.
There are five (5) steps to obtain FAA temporary premium war risk insurance:
- The air operator completes the application.
- A person authorized to bind the air operator completes the online component of the application, starting with the steps below.
- The Applicant will receive, by e-mail, a PDF copy of the aforementioned MOA with the carrier’s information filled out.
- The air carrier signs and returns to FAA two (2) original copies of the aforementioned MOA to the Aviation Insurance Office by U.S. Mail or courier.
- FAA reviews the submission and if it approves the application, the FAA provides the air carrier with access to AIDMS.
- The air carrier uploads into the online data system:
- Its fleet information, which is the "Schedule of Aircraft" that are to be insured.
- An electronic copy of the carrier’s current all-risk aviation insurance policy. The carrier is responsible at all times for the currentness, completeness, and correctness of all information that carrier enters into, uploads into, or posts on an FAA aviation insurance electronic data system.
- If the conditions under 49 USC 44302a are met and the FAA decides to issue coverage, the FAA will issue a temporary premium war risk insurance policy electronically through AIDMS and inform the carrier that their policy is available in AIDMS.
- The air carrier accepts the policy and provides the premium as determined by the FAA, which will be based on the air carrier’s terminated commercial policy, specifically the total policy premium and the hull war risk slip. The air carrier must provide any records and information requested by FAA for the purpose of calculating the premium. For avoidance of doubt, the temporary premium insurance policy will become effective according to the terms and conditions of the policy.
Before you begin the application process, please review the sample MOA to ensure you have all the information necessary to bind your company.